The Operating Cycle

question 47

Multiple Choice

The operating cycle

• A) begins when a firm receives the raw materials that would be used to produce the goods that the firm manufactures.
• B) begins when a firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales.
• C) cannot be measured without knowing the days' payables outstanding.
• D) does not end with the finished goods being sold to customers and the cash collected on the sales; but when you take into account the time taken by the firm to pay for its purchases.

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Definitions:

1950s

A decade marked by post-World War II recovery, the beginning of the Cold War, and significant social and economic changes in many parts of the world.

Cold War

A period of geopolitical tension between the Soviet Union and the United States and their respective allies, roughly from 1947 to 1991, characterized by threats, propaganda, and other measures short of open warfare.

Third World

A term originally used to describe countries that were not aligned with either the capitalist NATO bloc or the communist Soviet bloc during the Cold War, now often used to refer to developing countries.

American Freedom

The ideals and practices of liberty, rights, and democracy that are foundational to the United States and its national identity.